Previously posted a discussion on event contracts, and some friends had doubts, thinking this is pure gambling. That's correct; this is pure gambling. However, can we find advantageous betting opportunities in pure gambling? Today, I will share one method I use to judge event contracts.
Firstly, I am not a big player. Personally, I have been a novice losing money since I first started trading. These are experiences learned through real financial losses. Since I play forex and not the cryptocurrency market, I happened to play around on the weekend and discovered this. I don't have time to look during trading days. My win rate, based on my previous posts, is about 60%.
I will treat the ten-minute cycle of event contracts as ten-minute candlesticks and only place orders at every ten-minute mark. Therefore, what we are actually betting on is the rise and fall of the next ten-minute candlestick (Binance is quite inconvenient as they don't have ten-minute candlesticks, making it less intuitive), so we need to find the timing when the next candlestick is likely to occur.
The candlestick chart I casually captured before posting, it's a ten-minute chart. The red and blue arrows in this chart are all signals for me to enter the market. Most of the time, price fluctuations are random, but at specific times, we can judge that there is a probabilistic advantage, such as the trend state I captured.
Every trading logic I explain, the first red arrow, based on the information on the chart, breaks through a small range and also breaks the lowest point on the far left. It is highly likely that the selling force of the bears has not ended, so I will go short. The second red arrow follows the same reasoning, and there was a sufficient downward force before. The third yellow arrow is specially marked; although it also broke through, the breaking force is insufficient, and I cannot guarantee that the next candle will definitely close as a bearish candle. The red arrows 4, 5, and 6 all follow the same logic: a bullish rebound in a downward trend, but a strong breakthrough from a bearish signal candlestick, allowing us to judge that the next candlestick will likely continue the trend. The blue candlestick on the right is also a signal for me to enter the market, but that involves patterns and I won’t elaborate on everything here; some will win and some will lose.
To summarize, I said at the beginning that this is gambling, and that's correct. I believe that short-term speculative trading is a form of gambling. When I understood trading as gambling, I transformed from a continuously losing novice into a slightly profitable one, occasionally hitting trends and making some money. What we need to find is the betting moments with probabilistic advantages where we might incur small losses but could also make large profits. The techniques for event contracts mentioned above are based on this logic: to find potential opportunities where bearish or bullish forces have not fully released, and bet on the continuation of the next candlestick. Theoretically, as long as we achieve a 55% win rate, we can be profitable. However, in reality, there cannot always be rationality, and the market is unpredictable. If a misjudgment leads to losses, what should we do afterward? The odds of 1 to 0.8 are really unfavorable. If we could consistently guarantee our win rate and rationality, wouldn't trading contracts be more profitable?
The above is my insight on event contracts. If you have anything related to trading, feel free to communicate with me.